boycott companies selling speakers in India. Join hands now!

[qoolss]

guys,

I am absolutely appalled and literally bemused to see obscene prices dealers are asking here in india market. They usually come with very lame excuse like duty which i understand is 36% to 39%. however, they get huge profit margin from companies they have dealership/distributorship off. I asked the soundsmith people about Dynaudio Focus 220 today and was absolutely gobsmacked to hear Rs.240,000 for speaker which cost around 160,000 even in expensive market liek UK where duties are also on higher side. I wouldn't stop laughing if US prices are mentioned here for the same.

I think through this forum we can atleast push some of them to have a reality check and bring the prices down. This is not purely based on one incident as I have had few already ever since I have touched the motherland.

stand up guys and let's boycott these people.

MODS: cosidering the freedom of voice I am assuming will not be banned from this forum. If that would be the case then I am sorry to say I wouldn't be interested to be a part of it either.

Kind regards,

Swatantra

 

[ashishkesarwani]

You are absolutely right in pointing this out. But this is not the case in speakers alone, its widespread all along the Electronics segments in which we are dependent on imports. In india some of it also accounts towards our duty structure to safeguard our local industries. I guess the prices in India are calculated accordingly
Price of X good converted with the US $ @ 49(approx) + Cartage is added to it + customs duty @ 36% - 40% (even on the cost of shipping) + distributer's margin atleast 15% + dealer margin atleast 20% + vat which is on the higher side and can go upto 20% on few items but normally varies from 4% - 12.5%.
After adding all this the prices seems to be double of what is avaliable abroad after adding almost 90% to the cost of the original goods.

 

[psychotropic]

okay, but who do we boycott?? And how do we know whose fault it is? It could be one of

a) the Company
b) the distributor
c) the dealer

A boycott therefore may not be feasible.

But yes your point is valid. And the duty argument is bullshit, because then companies like Wharfedale, Usher, Cambridge Audio, Audioengine should not be able to sell their stuff here for prices comparable to international prices.

 

[ajinkya]

Before raising the red flag, I think someone should post real-world prices and breakup of what goes to whom when an Indian customer purchases speakers. Otherwise, we are all just talking in the air.

Is anyone here knowledgeable enough to post the price breakdown for a brand of speakers? This could be something they obtained from a known dealer or from a source whose accuracy they are sure of. Only then can we take this argument forward regarding boycott or not. Without data (an engineer's nightmare!), there is nothing to discuss. And I mean real data (authentic price breakdown), not customer perceived results.

 

[suri]

the marketplace is a great leveller - collective/coercive action is not necessary.

each one buys what he/she wants at what he/she thinks is a fair price.

at the end of the day when the dust has settled, the ones left standing will be the companies whose products are worth buying.

so let the river flow and flow with it

so if one particular dealer wants to make a killing with every pair of dynaudio focus speakers he/she sells, there will be another who thinks "Hey that @#$#@ is trying to cheat the honest upstanding indian customer, i will sell at the correct rate and corner that business".

and ultimately, the dynaudio will be sold at the correct price to the indian customer - or fail to sell and dynaudio will close shop

i suppose one should not buy when the product is newly released but wait and watch for the prices to cool, or for the company to shut shop

 

[gap g j]

In the AV Receiver The MRP of Yamaha 663 is 52K in the company website but it is retailed for 37.5K in some places in bangalore, and 32K in Delhi and one member has posted here in this forum he had bought for 30K with bill and warranty.

What is the real price? How much discount we can bargain?

Any dealer like excite, relinace digital or croma will not sell less because they have lot of overheads such as vast showroom rental, employee salaries, electrictiy, etc.

 

[doors666]

You are absolutely right in pointing this out. But this is not the case in speakers alone, its widespread all along the Electronics segments in which we are dependent on imports. In india some of it also accounts towards our duty structure to safeguard our local industries. I guess the prices in India are calculated accordingly
Price of X good converted with the US $ @ 49(approx) + Cartage is added to it + customs duty @ 36% - 40% (even on the cost of shipping) + distributer's margin atleast 15% + dealer margin atleast 20% + vat which is on the higher side and can go upto 20% on few items but normally varies from 4% - 12.5%.
After adding all this the prices seems to be double of what is avaliable abroad after adding almost 90% to the cost of the original goods.

Not really. If a product is msrp at 1000$, but sells in US for 600$, the distributor probably will pay about 350-400$ for this, but for his calculations, he uses 1000$ at 49 to charge us. In the US, the distributor and dealer margins are already embedded in the 600$ selling price. So when you are adding all this, u r adding it twice.

Shipping, the guy will charge you for shipping as if he's just ordering a single piece for you, not a container full of goods, the actual shipping is much lesser than what these guys charge you.

Custom duty, well I dont know much about this, but considering our corrupt custom officials, there is absolutely no guarantee that these guys are even paying custom duty, for all you know, they just might be paying a meagre bribe and getting away with it.

Most of the guys are actually making an obscene amount of profit on each item sold.

If I get an item directly from US, a single item, paying hefty shipping, and full custom duty, it still works out cheaper than buying it here for many items. That proves that the dealer is taking you for a ride and you cant do shit about it apart from not buying it.

 

[qoolss]

will post the comparison fairly soon and I am sure most of you will be appalled liek I have after hearing the difference.

Kind regards,

Swatantra

 

[qoolss]

Not really. If a product is msrp at 1000$, but sells in US for 600$, the distributor probably will pay about 350-400$ for this, but for his calculations, he uses 1000$ at 49 to charge us. In the US, the distributor and dealer margins are already embedded in the 600$ selling price. So when you are adding all this, u r adding it twice.

Shipping, the guy will charge you for shipping as if he's just ordering a single piece for you, not a container full of goods, the actual shipping is much lesser than what these guys charge you.

Custom duty, well I dont know much about this, but considering our corrupt custom officials, there is absolutely no guarantee that these guys are even paying custom duty, for all you know, they just might be paying a meagre bribe and getting away with it.

Most of the guys are actually making an obscene amount of profit on each item sold.

If I get an item directly from US, a single item, paying hefty shipping, and full custom duty, it still works out cheaper than buying it here for many items. That proves that the dealer is taking you for a ride and you cant do shit about it apart from not buying it.

you are right in saying custom duty as I have just transffered from Dubai to India and paid 18,000 RS for all my stuff as a duty (all went to custom officer's pocket as they didn't give me any receipt when i asked) which clearly shows that there are tons of loopholes in the system which these guy take advantage off. also, the frieght is cheaper with any freight forwarder as they work on volume and consistency basis rather then what they make us believe (i know all this as my father is into import and export business and get special rates for both sides which is much cheaper then usual). last but not least in foriegn markets the distributor doesn't pay from his pocket and work on volume business then other. hence the percentage is smaller in comparison to retailers who have massive margins. I understand that they have to make money as well for bringing in the market, but hey its all about realistic prices not anything ro everything they ask here knowing these guy can't import themselves.

regards,

swatantra

 

[hemantwaghe]

You are absolutely right in pointing this out. But this is not the case in speakers alone, its widespread all along the Electronics segments in which we are dependent on imports. In india some of it also accounts towards our duty structure to safeguard our local industries. I guess the prices in India are calculated accordingly
Price of X good converted with the US $ @ 49(approx) + Cartage is added to it + customs duty @ 36% - 40% (even on the cost of shipping) + distributer's margin atleast 15% + dealer margin atleast 20% + vat which is on the higher side and can go upto 20% on few items but normally varies from 4% - 12.5%.
After adding all this the prices seems to be double of what is avaliable abroad after adding almost 90% to the cost of the original goods.

You have not alculated
1) Rentals - Very High
2) Cost of staff'
3) Training costs
4) Risks

Also Indian market is too small compared international one -so small that some of the mother companies not even paying full attension to this market. That too add the price . Indian distributor may be pickig up 30-40 SKUs where a distri is picking up 1000's!

And then there is cost of warentee and providing service , again you equire trained personnel for that .

I still agree that dealer profits are high but not as obscene as you think. And due to high prices their volume remains low . This is vicious circle someone must break!

 

[gobble]

You are absolutely right in pointing this out. But this is not the case in speakers alone, its widespread all along the Electronics segments in which we are dependent on imports. In india some of it also accounts towards our duty structure to safeguard our local industries. I guess the prices in India are calculated accordingly
Price of X good converted with the US $ @ 49(approx) + Cartage is added to it + customs duty @ 36% - 40% (even on the cost of shipping) + distributer's margin atleast 15% + dealer margin atleast 20% + vat which is on the higher side and can go upto 20% on few items but normally varies from 4% - 12.5%.
After adding all this the prices seems to be double of what is avaliable abroad after adding almost 90% to the cost of the original goods.

Taking the base price as International MRP is not right is it? Disties get a distie price which is much lesser for sure.

Cheers

 

[gobble]

You have not alculated
1) Rentals - Very High
2) Cost of staff'
3) Training costs
4) Risks

Also Indian market is too small compared international one -so small that some of the mother companies not even paying full attension to this market. That too add the price . Indian distributor may be pickig up 30-40 SKUs where a distri is picking up 1000's!

And then there is cost of warentee and providing service , again you equire trained personnel for that .

I still agree that dealer profits are high but not as obscene as you think. And due to high prices their volume remains low . This is vicious circle someone must break!

I agree to an extent - the hifi audio distribution model is based on a elitist consumer model approach. If you read marketing books that mgmt students read, there are plenty of stories about how some manufacturers struggle with years of research to bring the product price down before they make the breakthrough. Likewise there are many stories of how pricing becomes a barrier to market penetration. Somebody needs to take the challenge of high volume moderate costs distribution model in Hifi audio industry.

I feel really sad that so many middle class Indians never hear good audio because anything decent begins at 70K and above for a complete setup.

Regards

 

[ashishkesarwani]

In all the cases the dealer and distributer margin is not more than 40%, and I totally agree that the Indian Rental costs + other overheads are too high if you are running a full fledged showroom like the Profx does, and it all depends on turnover too as in the case of automobiles wherein a least selling model spares cost way more than the popular selling model one, so here I like to point out that due to the low turnover and to maintain their expenses they are bound to charge such huge profits.

 

[murali_n]

Hai All,

But would it not be better for the parent Company to indicate the MRP to be sold at the target country thro their main distributor's website so that the Customer is not charged beyond that.

N Murali

 

[qoolss]

I agree to an extent - the hifi audio distribution model is based on a elitist consumer model approach. If you read marketing books that mgmt students read, there are plenty of stories about how some manufacturers struggle with years of research to bring the product price down before they make the breakthrough. Likewise there are many stories of how pricing becomes a barrier to market penetration. Somebody needs to take the challenge of high volume moderate costs distribution model in Hifi audio industry.

I feel really sad that so many middle class Indians never hear good audio because anything decent begins at 70K and above for a complete setup.

Regards

Hemant I am not sure whether you had any tie up with any company in the past or not but I have and can tell you the volume only makes differences when it is above certain level.

1. the rentals are less then any european country
2. cost of staff I guess you are having a joke here. the cost of staff in India would be max 10,000 Rs in comparison to Europe where it is in excess of atleast 50,000 to 90,000 rs a month.
3. training cost again if you can show me well trained people then i will certainly consider this argument but remind you its fairly less in comparison
4. lastly risk which is there in every market. but, if the prices are realistic and approachable then its less risk then vis a vis.

Indian market is small. yes I agree with this point but so is the other stuff like above mentioned. as for waranty everything comes from manufacturer if anything goes wrong and they obviously charge for that. in india its not like if you are not happy you can return the product, instead once sold it can not be returned unless you are ready to take half price.

there are lot of things which you need to look at before pilling up list of completely opposite things as a arguement.

regards,

s

 

[Yogesh]

All excuses of duty, overhead are flimsy. They just want to fleece whoever stumbles into their shop. Duty is 30-37%. Overhead like wages,rental,electricity, r nowhere near Europe/US.

If u buy at MRP, they will be happily rob u, if u ask for discount, they will offer a discount of 1-2% as it is going to kill them. Bargain hard and the crooks will part with as much as 20-40%.

 

[KHK]

Of course, the dealers have overheads, etc to take care, but then it is the same for all dealers. Still we have some dealers selling at decent rates, and others at exorbitant rates.

There are many rich customers out there who are willing to fork out that amt of money, so in a way they are justified. High margin, low numbers.

As long as we take advantage of this community and make a masterlist of 'competitive' and 'expensive' dealers, and boycott the later, we should be fine

 

[gobble]

stand up guys and let's boycott these people.


Kind regards,

Swatantra

Already doing it, trust me! my new speakers are Indian made (Budget audire) and so is my new preamp (Lyrita) coming next month.

And I intend to upgrade only when I make a phoren trip ...

Regards

 

[ashishkesarwani]

Of course, the dealers have overheads, etc to take care, but then it is the same for all dealers. Still we have some dealers selling at decent rates, and others at exorbitant rates.

There are many rich customers out there who are willing to fork out that amt of money, so in a way they are justified. High margin, low numbers.

As long as we take advantage of this community and make a masterlist of 'competitive' and 'expensive' dealers, and boycott the later, we should be fine

In that list of yours Add A2V distributers and dealers for B&W and Rotel in India.

 

[sud98]

I think the arguments that dealers are fleecing is a bit too simplistic. On the other hand, to think that the market will decide is true but generally takes a very long time.

To cite an example, mobile phone rates when they started were at around 16Rs. per min. Everyone thought it was an elitist product and will never make it to the masses. Also, the existing players formed a clique to ensure these prices remain fixed. It then took a market breaker like Reliance to introduce lower prices, the rest also saw there is profits in volume and followed.

Similarly, in the hifi market you will notice there are brands like Wharfedale which price them very close to their home UK market and one of the bigger reasons why they are so heavily recommended in this forum as the VFM factor is immense.

In the Indian hifi the prices get a lot determined by the main distributor of the brand and their strategy for the same. Its like the skoda/vw/audi share the same platform for certain models but each one wants to be at different levels of brand perception and hence prices accordingly.

In the Indian market, there are brands like WF, Usher which are very close to prices abroad and some like Oppo, B&W which are not. So although you may not find a cheaper dealer for the brand, you would end up moving to a different brand.

One can only hope that this will make the parent companies and their distributors wiser to change the pricing strategy as India will always be a price sensitive market.

How else one would explain someone buying a Mercedes E class but wants to save on fuel by opting for the diesel option?